EU and Mercosur to close trade agreement in October

The Mercosur block, which comprises South American largest economies, and the European Union are confident in linking the two markets in less than two months.

After a long impasse in talks, the European Union and the Mercosur block –Argentina, Brazil, Paraguay and Uruguay; plus Chile, Bolivia, Peru and Venezuela as associated members- say it is still possible to meet an October 31 deadline to link the two markets, although there is still a hard negotiation ahead on agricultural issues. EU trade chief Pascal Lamy and Brazil's foreign minister, Celso Amorim, confirmed their will to close the deal in time after a meeting in Brasilia where representatives of the two blocks met to discuss trade integration.

Both block met again after two rounds of negotiations in as many months, which failed to reach agreement on key areas like farm trade and industrial goods or even how talks should proceed.  "The spirit is to try to meet the deadline we had in mind," Lamy said at a news conference after the meeting. "A lot of work needs to be done but it is worth putting our people to work again." Amorim added: "We not only confirmed our political willingness, but the schedule for our meetings."

Nevertheless, EU and Brazilian officials said privately that little time remained for the two trade blocks to work out the details of such a difficult accord, which has been under negotiation the last four years. Both sides plan to present final offers by Sept. 20.

Earlier this month, Argentine Foreign Minister, Rafael Bielsa, told in a news conference with foreign correspondents credited in Buenos Aires that Argentina preferred “a comprehensive agreement in January or February 2005, to a restricted one in October”, raising fears on a new delay in negotiations.
 
The talks between the 25-state EU and Mercosur resumed on Monday in Brussels. Amorim said earlier this week both sides agreed on the basics but still needed to work out the details of how to boost the US$40 ($62 billion) in trade between the groups. Each side has complained they will lose out under current proposals to link the markets of 29 countries and 680 million people by 2005.

Mercosur officials claim for a wide lift of EU trade barriers to farm products, while EU representatives want a compromise from Mercosur to open its market to European service and industrial production.

Lamy appeared optimistic, saying both sides "have the feeling that if we consider what is on the table, an improvement on both sides is both feasible and necessary."